Kambi, a leader in legal sports betting technology, announced its second quarter earnings on Wednesday. While revenues grew 24 percent over the same quarter last year, its earnings continued to weaken.
Kambi’s diluted earnings per share came in at €0.83 per share, down 23% from the second quarter of last year. But like its first quarter results, Kambi’s second quarter can be viewed as transitional.
After losing a key partnership with online sports betting site DraftKings – and in the process of ending its relationship with Penn Entertainment – Kambi worked hard to fill its revenue gap. The company added some smaller partners and expanded into more US state. For instance, Kambi partnered with WarHorse Gaming to launch the first sportsbook in Nebraska during the second quarter.
To truly get its earnings mojo back, however, Kambi needed a big deal. And Kambi may have finally found that deal with Bally’s.
Bally's partnership up and running
In May, Kambi signed a multi-year deal with Bally’s to supply its sport betting platform. Bally’s had acquired Bet.Works to develop its own, in-house, technology solution. But Bally’s, owner of Bally Bet, was unhappy with the results. Although too new to make a material difference in the second quarter, Kambi has already launched at Bally’s Shreveport and Biloxi locations.
Kambi CEO Kristian Nylén noted, “Bally’s decision to replace its proprietary sportsbook with Kambi Complete underlines the current pressures facing many in-house sport betting operations. Indeed, demand for our Complete sportsbook service remains high.”
Kambi – winner of both EGR’s B2B 2023 Sports Betting Software and Innovation in Sports Betting Software awards – has also been able to extend existing partnerships with online sportsbooks and casinos looking for a dependable edge. Kambi successfully extended its partnerships with LeoVegas Group, BetPlay, and Paf during the second quarter.
Q2 helped by soccer and March Madness, hurt by Penn
Kambi’s second quarter got a boost from both March Madness and soccer. Kambi’s top turnover event of the quarter was the Champions League final between Manchester City and Inter Milan. The NCAA Men’s Basketball Championship match between the University of Connecticut and San Diego State was the second biggest turnover event of the quarter.
Like other sports betting providers, Kambi missed having Wimbledon in the second quarter, as it was last year. That said, tennis still generated Kambi’s fourth largest turnover for the quarter.
One significant drag on Kambi’s earnings was Penn Entertainment. Even though their relationship was still intact during the quarter, Penn’s contribution dropped. Penn reduced their marketing spend and elected to forgo product improvements during the quarter. As a result, Penn appeared to lose market share across several US states.
More industry shuffling expected
Legal sports betting in the US has been a tumultuous sector. In 2018, after the US Supreme Court lifted the ban on US sports betting, the floodgates opened. States rushed to tap the nascent revenue stream, while sportsbooks went from state to state, applying for any license they could get.
Now that the dust is beginning to settle, the industry is attempting to optimize. As a result, sportsbooks are reevaluating their partnerships and tech stacks. And technology providers, like Kambi, have had to stay nimble. But Kambi’s relationship with Bally’s seems to have hit the ground running, which bodes well for the coming quarter.
